Real Property, Financial Services & Title Insurance Case Law Update

by Carlton Fields
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I. FLORIDA STATE CASES – JOURDAN HAYNES & ILAN NIEUCHOWICZ

  • Landlord/Tenant: lessor did not breach commercial lease by failing to complete construction by date certain where lease did not provide date by which property was to be ready for occupation – 326-330 St. Armands Circle, LLC v. GEE22, LLC, No. 2D12-2395 (Fla. 2d DCA April 16, 2014) (reversed and remanded)
  • Foreclosure/Notice: foreclosure judgment reversed where mortgagors filed notice of change of address but lender sent notice of final hearing to mortgagors former address and mortgagors failed to attend summary judgment hearing – Rodriguez v. ALS Commercial Funding, LLC, No. 3D13-772 (Fla. 3d DCA April 16, 2014) (reversed and remanded)
  • Statute of Limitations/Breach of Contract:  where defendant anticipatorily breached contract requiring payment in full within five-years and plaintiff elected to await time for performance, action did not accrue for statute of limitations purposes until five years passed without payment – Dutra v. Kaplan, No. 3D13-647 (Fla. 3d DCA April 16, 2014) (reversed and remanded)
  • Foreclosure: foreclosure judgment reversed where case not “at issue” because order setting case for trial entered before plaintiff filed responsive pleading to defendant's counterclaim – Tucker v. The Bank of New York Mellon, No. 3D13-2258 (Fla. 3d DCA April 16, 2014) (reversed and remanded)
  • Liquidated Damages: specific performance option in contract did not render liquidated damages provision unenforceable; fact that amount was 7.6% of purchase price or that property subsequently sold for $200,000 more than original contract price also did not render liquidated damages unconscionable - San Francisco Distribution Center, LLC v. Stonemason Partners, LP, No. 3D-13-2320 (Fla. 3d DCA April 16, 2014) (affirmed)
  • Foreclosure After Bankruptcy Discharge: although chapter 7 bankruptcy discharged borrower’s personal liability and precluded lender from seeking deficiency judgment, it did not affect lender’s right to foreclose its mortgage lien - Deutsche Bank Trust Company Americas, Trustee v Nash, et al., Case No. 2D12-5318 (Fla. 2d DCA April 23, 2014) (reversed and remanded)
  • Foreclosure: final judgment granting involuntary dismissal proper because lender failed to admit original note into evidence or provide sufficient explanation why it was not doing so at trial where record did not reflect that original note had been previously filed -  Deutsche Bank National Trust Company, as Trustee v Humber, Case No. 4D12-3696 (Fla. 4th DCA April 23, 2014) (dismissal affirmed and remanded for portions of final judgment to be stricken)
  • Foreclosure:  lender’s loan servicing agent is proper representative to verify mortgage foreclosure complaint and improper for court to dismiss foreclosure action for lack of standing where lender was plaintiff and record was clear servicing agent not party to action -  Deutsche Bank National Trust Company, as Trustee v Humber, Case No. 4D12-3696 (Fla. 4th DCA April 23, 2014) (dismissal affirmed and remanded for portions of final judgment to be stricken)
  • Statute of Limitations/Mortgage Foreclosure: default occurring after failed foreclosure attempt creates new cause of action for statute of limitations purposes, even where acceleration had been triggered and first case dismissed on merits and certifying to Florida Supreme Court question whether acceleration of payments due under note and mortgage in foreclosure action that was dismissed pursuant to Rule 1.420(b), Fla. R. Civ. P., triggers application of statute of limitations to prevent subsequent foreclosure action by mortgagee based on payment defaults occurring subsequent to dismissal of first foreclosure suit - U.S. Bank National Association v Bartram, et al., Case No. 5D12-3823 (Fla. 5th DCA April 25, 2014) (reversed, remanded, question certified)
  • Standing and Business Records: plaintiff could not establish necessary foundation for admitting account balance report and consolidated notes log into evidence under business records exception because representative for plaintiff was neither current nor former employee of originating lender and lacked particular knowledge of originating lender’s record-keeping procedures - Hunter v Aurora Loan Servicing, LLC, Case No. 1D12-6071 (Fla. 1st DCA April 25, 2014) (reversed and remanded)
  • Business Records: supervisor who had sufficient understanding of bank’s computerized loan processing system competent to establish foundation necessary to admit business records even though she did not personally oversee operation of computer system, was not personally responsible for posting payments to system, and did not know identity of particular person who entered each transaction reflected on printouts attached to her affidavit - Lindsey, et al. v Cadence Bank, N.A., Case No. 1D13-4686 (Fla. 1st DCA April 24, 2014) (affirmed in part, reversed in part and remanded with directions)

II. 11TH CIRCUIT CASES - JIN LIU

  • Force-Placed Insurance/Breach of Contract: borrower may claim breach of contract against lender if lender unreasonably force-placed insurance in violation of mortgage’s requirement for reasonableness even though mortgage also gave lender discretion to force-place insurance -- Mahdavieh v. Suntrust Mortgage, Inc., No. 13-60281-CIV (S.D. Fla. April 7, 2014) (granting in part and denying in part defendants’ motion to dismiss)
  • Force-Placed Insurance/ Breach of Implied Covenant of Good Faith and Fair Dealing: borrower may claim breach of implied covenant of good faith and fair dealing against lender if lender force-placed unnecessary and excessively-priced insurance in return for unearned kickbacks even though mortgage gave lender discretion to force-place insurance Mahdavieh v. Suntrust Mortgage, Inc., No. 13-60281-CIV (S.D. Fla. April 7, 2014) (granting in part and denying in part defendants’ motion to dismiss)
  • Force-Placed Insurance/ Fiduciary Duty: Lender who also acted as escrow holder may owe borrower a fiduciary duty, which may be breached if lender charged borrower unnecessary and excessive force-placed insurance -- Mahdavieh v. Suntrust Mortgage, Inc., No. 13-60281-CIV (S.D. Fla. April 7, 2014) (granting in part and denying in part defendants’ motion to dismiss)
  • FDCPA: loan servicer may secure vacant house pursuant to express authorization in mortgage without violating FDCPA – Miller v. Nationstar Mortgage, No. 13-13030 (11th Circ. April 14, 2014) (affirming grant of summary judgment in favor of defendant)

III. TITLE INSURANCE CASES - CHRIS SMART & MARTY SOLOMON

  • Class Action: summary judgment in favor of title insurer and against certified class of refinancing borrowers who alleged they had been overcharged by not being provided reissue rates for title insurance – Higgins v. Commonwealth Land Title Ins. Co., Case No. 04-365-CA (Fla. 4th Cir., Nassau County, April 21, 2014) (slip op.)
  • Class Action: decertifying class of refinancing borrowers who alleged they had been overcharged by not being provided reissue and refinance rates for title insurance – Alberton v. Commonwealth Land Title Ins. Co., Case No. 2:06-cv-03755-ER (E.D. Pa. April 25, 2014) (slip op.)
  • Exclusion 3(d): where insurer fails to plead a defense but relies on it and the insured does not object at the trial level, the insured is precluded from raising the failure to plead on appeal – Woodle v. Commonwealth Land Title Insurance Company, No. S-13-111 (Neb. April 11, 2014) (affirming summary judgment)
  • Exclusion 3(d): implied easements attach to property at the time of the judicial decree recognizing their existence, and, if that is after the date of the title insurance policy, the implied easements are excluded as having been created after the date of the policy  – Woodle v. Commonwealth Land Title Insurance Company, No. S-13-111 (Neb. April 11, 2014) (affirming summary judgment)
  • CPL: contractual statute of limitations tolled under Connecticut law where agent concealed his fraud from lender – JP Morgan Chase Bank v. Old Republic Nat. Title Ins. Co., No. 126029085S (Conn. March 11, 2014) (granting summary judgment)
  • Insurer’s Duty: insurer who is prepared tender funds on a policy claim, but fails to do so has not satisfied its obligation under a policy, even when the insured fails to dispute the amount being tendered and to provide a release of mortgage from the actual lender – JP Morgan Chase Bank v. Old Republic Nat. Title Ins. Co., No. 126029085S (Conn. March 11, 2014) (granting summary judgment)
  • Escrow Agent: where payments are disbursed to lender’s servicer and escrow agent has not knowledge of servicer’s scheme to defraud lender, lender fails to state a cause of action against escrow agent -- Fazeli v. Williamson, No. H036951 (Cal. App. March 27, 2014) (affirming escrow agents’ demurrers)
  • CPL: a breach of contract claim on the form of CPL issued in Michigan is independent of the related title insurance commitment because those instruments protect against different risks – FDIC-R (WaMu) v. First American Title Ins. Co., No. 12-2094 (6th Cir. April 24, 2014) (affirming judgment)
  • CPL: FDIC-R’s sale of loan and title insurance commitment does not prevent FDIC-R’s claim on the form of CPL issued in Michigan because the CPL is addressed to the lender, its successors and assigns, and does not contain a provision precluding such a claim after sale of the loan and title insurance – FDIC-R (WaMu) v. First American Title Ins. Co., No. 12-2094 (6th Cir. April 24, 2014) (affirming judgment)
  • CPL: FDIC-R’s sale of loan and title insurance commitment does not prevent FDIC-R’s claim on the form of CPL issued in Michigan because the CPL is addressed to the lender, its successors and assigns, and does not contain a provision precluding such a claim after sale of the loan and title insurance – FDIC-R (WaMu) v. First American Title Ins. Co., No. 12-2094 (6th Cir. April 24, 2014) (affirming judgment)
  • CPL: title insurer lacked standing to challenge stipulation between parties to purchase and assumption agreement as to the meaning of that agreement – FDIC-R (WaMu) v. First American Title Ins. Co., No. 12-2094 (6th Cir. April 24, 2014) (affirming judgment)
  • CPL: title insurer not subject to double liability where final judgment is less than the amount the original lender transferred to the closing agent for the transaction – FDIC-R (WaMu) v. First American Title Ins. Co., No. 12-2094 (6th Cir. April 24, 2014) (affirming judgment)
  • CPL: evidence that new lender claimed ownership of CPLs pursuant to purchase and assumption agreement in pleadings in other actions is not controlling, does not undermine FDIC-R’s position in this action that it owns the CPL, and is insufficient to support Rule 60(b)(2) motion – FDIC-R (WaMu) v. First American Title Ins. Co., No. 12-2094 (6th Cir. April 24, 2014) (affirming judgment)

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